What exactly do you need to consider when looking for the perfect premises?

A universal answer to the question of what makes the perfect office space doesn’t exist. The kind of space you need, and will be comfortable in, depends entirely on the type of business you’re running. The same goes for the amount of space needed per worker. If all you require is a small desk and a phone connection, you don’t need masses of square footage. However, if your office also acts as your shop floor – a place to meet with clients – you’ll want a bit more space and possibly a more attractive and accessible location.

When it comes to size, Ann Clarke, design director at Claremont Group Interiors, is reluctant to dwell on average measurements because of the varying nature of what you need the space for. “Organisations like the British Council of Offices have certain recommendations but they’re reducing all the time because space is becoming increasingly expensive,” she explains.

 

However, there are some rough industry standards. For example, a densely packed call centre can get away with about 6-7 square metres per head, but a professional services firm will need more like 10-12 to allow for consultation space for clients.

It’s also important to bear in mind how much of the space is actually usable, and this can be dramatically affected by the shape of the building. “There are lots of things that impact the efficiency of a space,” says Clarke. “The shape of a building, where the lifts and stairs are and the amount of circulation space all make a difference. It all depends on how the floor plate is laid out.”

Clarke says the ideal office has a usable space/circulation space ratio of 85:15. “Once it falls below 85% it can get difficult and you won’t be able to use the space efficiently.”

If you want to minimise the amount of square footage you need, Clarke advises implementing some clever desk policies. Just because you employ 50 people, it doesn’t mean you need 50 desks. Working practices such as desk booking and hotdesking can work wonders if many of your staff are only in the office at certain times during the day or week.

“Think long and hard about storage too,” urges Clarke. “Do you really need to store all that paper on site, or can it be stored digitally or moved to cheaper storage facilities? You should have a clear idea about how you’re going to manage your storage before you commit to a particular space.”

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How to Start a Consulting Business

Businesses certainly understand what consultants are. In 1997 U.S. businesses spent just over $12 billion on consulting. According to Anna Flowers, spokesperson for the Association of Professional Consultants in Irvine, California, the association has recently noticed an increase in calls for information from people who want to get into the business. "The market is opening up for [the consulting-for-businesses] arena," Flowers says.

Melinda P., an independent consultant in Arlington, Virginia, thinks more people are getting into the consulting field because technology has made it easier to do so. "The same technology that has helped me to be successful as a consultant has made it easier for others to do the same," she says.

A consultant's job is to consult. Nothing more, nothing less. It's that simple. There's no magic formula or secret that makes one consultant more successful than another one.

But what separates a good consultant from a bad consultant is a passion and drive for excellence. And--oh yes--a good consultant should be knowledgeable about the subject he or she is consulting in. That does make a difference.

You see, in this day and age, anyone can be a consultant. All you need to discover is what your particular gift is. For example, are you very comfortable working with computers? Do you keep up with the latest software and hardware information, which seems to be changing almost daily? And are you able to take that knowledge you have gained and turn it into a resource that someone would be willing to pay money for? Then you would have no trouble working as a computer consultant.

Or are you an expert in the fund-raising field? Maybe you have worked for nonprofit agencies in the field of fund-raising, marketing, public relations or sales, and over the years you have discovered how to raise money. As someone who has turned a decade of fund-raising successes into a lucrative consulting business, I can tell you that fund-raising consulting is indeed a growing industry.

Things to Consider Before You Become a Consultant

  • What certifications and special licensing will I need? Depending on your profession, you may need special certification or a special license before you can begin operating as a consultant. For example, fund-raising consultants don't need special certification, although you can become certified through the National Society of Fund Raising Executives. And in some states, you may need to register as a professional fund-raising consultant before starting your business.
  • Am I qualified to become a consultant? Before you hang out your shingle and hope that clients begin beating your door down to hire you, make sure you have the qualifications necessary to get the job done. If you want to be a computer consultant, for example, make sure you are up to date in the knowledge department with all the trends and changes in the computer industry.
  • Am I organized enough to become a consultant? Do I like to plan my day? Am I an expert when it comes to time management? You should have answered "yes" to all three of those questions!
  • Do I like to network? Networking is critical to the success of any type of consultant today. Begin building your network of contacts immediately.
  • Have I set long-term and short-term goals? And do they allow for me to become a consultant? If your goals do not match up with the time and energy it takes to open and successfully build a consulting business, then reconsider before making any move in this direction!

Top 20 Consulting Businesses Thriving Today

Although you can be a consultant in just about any field these days, the current top 20 consulting businesses include:

1. Accounting: Accounting is something that every business needs, no matter how large or small. Accounting consultants can help a business with all of its financial needs.

2. Advertising: This type of consultant is normally hired by a business to develop a good strategic advertising campaign.

3. Auditing: From consultants who audit utility bills for small businesses to consultants who handle major work for telecommunications firms, auditing consultants are enjoying the fruits of their labor.

4. Business: Know how to help a business turn a profit? If you have a good business sense, then you'll do well as a business consultant. After computer consulting, people in this field are the next most sought after.

5. Business writing: Everyone knows that most businesspeople have trouble when it comes to writing a report--or even a simple memo. Enter the business writing consultant, and everyone is happy!

6. Career counseling: With more and more people finding themselves victims of a corporate downsizing, career counselors will always be in demand. Career counselors guide their clients into a profession or job that will help them be both happy and productive as an employee.

7. Communications: Communications consultants specialize in helping employees in both large and small businesses better communicate with each other, which ultimately makes the business more efficient and operate smoothly.

8. Computer programmer: From software to hardware, and everything in between, if you know computers, your biggest problem will be not having enough hours in the day to meet your clients' demands!

9. Editorial services: From producing newsletters to corporate annual reports, consultants who are experts in the editorial field will always be appreciated.

10. Executive search/headhunter firms: While this is not for everyone, there are people who enjoy finding talent for employers.

11. Gardening: In the past decade the demand for gardening consultants has blossomed (pun intended) into a $1 million-a-year business. Not only are businesses hiring gardening consultants; so are people who are too busy to take care of their gardens at home.

12. Grantsmanship: Once you learn how to write a grant proposal, you can name your price.

13. Human resources: As long as businesses have people problems (and they always will), consultants in this field will enjoy a never-ending supply of corporate clients, both large and small. (People-problem prevention programs could include teaching employees to get along with others, respect and even violence prevention in the workplace.)

14. Insurance: Everyone needs insurance, and everyone needs an insurance consultant to help them find the best plan and pricing for them.

15. Marketing: Can you help a business write a marketing plan? Or do you have ideas that you feel will help promote a business? If so, why not try your hand as a marketing consultant?

16. Payroll management: Everyone needs to get paid. By using your knowledge and expertise in payroll management, you can provide this service to many businesses, both large and small.

17. Public relations: Getting good press coverage for any organization is a real art. When an organization finds a good PR consultant, they hang on to them for life!

18. Publishing: If you're interested in the publishing field, then learn everything you can and you, too, can be a publishing consultant. A publishing consultant usually helps new ventures when they are ready to launch a new newspaper, magazine, newsletter--and even websites and electronic newsletters.

19. Taxes: With the right marketing and business plan (and a sincere interest in taxes), your career as a tax consultant can be very lucrative. A tax consultant advises businesses on the legal methods to pay the least amount of tax possible.

20. Writing services: Anything related to the written word will always be in demand. Find your specialty in the writing field, and the sky will be the limit!

Target Market

Your idea may be the best one you have ever thought of, but there needs to be a market for your ideas. Someone must be willing and able to pay you for your expert advice.

In other words, who are your potential clients? Will you be marketing your consulting services to large corporations? Or will you offer a specialty that would only be of interest to smaller businesses? Perhaps your services will be sought after by nonprofit organizations. Whatever the case, before you go forward, make sure you spend time preparing both a business plan and a marketing plan. You won't be disappointed with the results--especially when clients begin paying you!

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Discrimination Settlements and Tax

You work hard for your employer, however, throughout your employment, you are discriminated against, due to your age and disability.

Eventually, you have had enough.  After a long process which resulted in your lodging a claim with the employment tribunal, your employer agrees to make an out of court settlement to compensate you for the discrimination you suffered.

The discrimination payment is paid to you, however, it is paid net of income tax.

You question this and are told that because the payment is being made in connection with your employment it is correct to pay income tax on the settlement figure.

This position is not correct! We have helped many clients reclaim income tax which has been incorrectly deducted from their settlement figures.

A discrimination payment is not a reward for service, far from it in fact, and should not be taxed as employment income.

In some cases, a discrimination payment may be taxed in accordance with the rules which apply to termination payments.  However, this is only where the discrimination is in connection with the termination of the employment itself.

In all other cases, it is our view that a reward paid in respect of discrimination occurring before the termination of the employment should not be taxed.

This is a complex area of tax law and it can be quite difficult to identify the value of any settlement which should have been paid tax-free.

However, we have successfully supported clients in obtaining refunds where settlements awarded for discrimination, personal injury, disability and injury to feeling have been taxed incorrectly and are leading experts in this area.

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Growing pains can be fatal

Too many well-established businesses can become fatally unhealthy because owners impulsively decide to grow them. Having survived the first three years after start-up, when one in three businesses fail, an owner will launch an expansion program on the basis of perceived market opportunities without a proper understanding of its complexities.

There are three fundamental causes of catastrophic business growth.

  • A rule of thumb is that if a business’s turnover is growing by $1m annually and it’s making $600,000 profit, then it needs to have on hand another $400,000 to fund growth and as a buffer against unforeseen circumstances.
  • Businesses attempt to grow when fundamentally they’re not profitable. Lack of cash is one manifestation of an unprofitable business.
  • Businesses are put in growth mode with insufficient working capital to pay for long-term assets like new plant. Trouble ensues when owners lose sight of what’s happening with profitability and cash flow.

Business owners contemplating a growth program must have an understanding of working capital absorption ration. This enables an owner to know how much working capital they require to increase sales by a specific number.

Business owners can blame virtually any factor or number of factors causing pain in their processes of growth, but it is at least one of the above three disruptions that may well kill the business.

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Unpaid Business Taxes: How to Settle Your Debt and Avoid Bankruptcy

If your business is in danger of facing bankruptcy, there may still be a way to avoid it. The ramifications for a business bankruptcy is pretty dire and can affect not only your business but other companies who are involved with you in hopes of improving their own efforts toward success. By declaring bankruptcy, you are opting out of paying your debts to these companies that are expecting money from you. This, in turn, affects their business’ bottom-line revenue, because now they’re taking a loss.

Bankruptcy. Not Cool. Not Cool at All!

Imagine if you loaned a friend $100 who promised to pay you back. That’s $100 that you’re expecting to put back in your bank account. You may have already spent that those funds trusting that your friend is going to make good on his or her promise—especially if there was a signed agreement that he or she signed. Then next month, they file for bankruptcy! What does that mean for you? It means that you’re out of $100 and if you jumped ahead and spent that promised money, then that snowballs into another debt that won’t get paid, or money taken out another stream of revenue to supplement the loss.

Either way, it doesn’t look good for you.

When you file for bankruptcy, you’ll suddenly understand the origin of the term, “You’ll never do business in this town again!” because no one will want to conduct business with someone who can’t successfully manage a business.

Bankruptcy is Avoidable!

One way you can settle your business debts is to negotiate with each of your debtors to accept a reduced payment to settle the loan. Many businesses will gladly accept that than nothing at all once they learn that you’re going out of business. In fact, they will appreciate your efforts of coming to them first trying to work something out rather than leaving them high and dry.

This may sound pretty simple, but before you start making negotiations, you’ll first need to prioritize your debts. There’s still payroll and payroll taxes that need to be met as well as other business expenses like rent/mortgage and utilities. Make a list of all the most pressing debts that your business has and address them accordingly.

Still, Need Help?

Even with prioritizing your debts, deciding which businesses get paid and which ones don't can still be a painful process. Another way to settle your debt and avoid bankruptcy is to let the tax experts handle everything.

Success Tax Relief has over 30 years of experience getting people out of tax debt, whether it’s personal or business-related. We specialize in audits, Offer in Compromise, tax preparation, installment agreements, personal credit counseling and helping you re-establish your business credit. Read all of the services we have to offer here.

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WHY DIFFERENT COMPANIES PAY DIFFERENT TAXES

Corporate tax is defined as “an assessment levied by a government on the profits of a company. The rate of corporate income tax paid by a business varies between countries, although since corporations are legal entities distinct from their owners and operators, they are typically taxed as if they were people.”

Generally, the tax code favors some activities and investments over others, and creates opportunities for certain firms that others can’t use. Amazon, given its widely known success, is widely known as the model corporate income taxpayer. Some say it is absent from the ranks of top taxpayers of Corporate America’s giants.

writes that Amazon’s 93.3 percent effective rate appears to substantial, “given that the statutory top income rate for partnerships in the U.S. is 35 percent (39.1 percent when you factor in state wage charges).” Their corporate rate of 93.3 is the most noteworthy of any G-20 nation, as indicated by the Congressional Budget Office.

Amazon’s corporate salary assessment charges are small, however, in light of the fact that its corporate pay is small. Wal-Mart, for example, has a pre tax wage that has totaled $209 billion since 2008, while Amazon remains at a relatively underwhelming number at under $11 billion.

Organizations face high tax rates because they have trouble shifting operations into a lower tax bracket. Then again, organizations that face high assessment rates have a tendency to have U.S.-concentrated organizations and a higher dependency on the tangible.

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New State Use Tax Reporting Requirements

More Use Tax Compliance Requirements, More Headaches on the Horizon.

In Quill Corp v. North Dakota, the Supreme Court established that for states to have the authority to require an out-of-state business to collect sales tax, that business must have a physical presence within the state.  

Several states, including Indiana, Maine, Massachusetts, North Dakota, Ohio, South Dakota, Tennessee, and Wyoming, are directly challenging this standard and have passed laws that require out-of-state vendors to collect sales tax without physical presence. These states argue that if a remote vendor makes over 100 (MA) or 200 (IN, ME, ND, OH, SD, WY) separate transactions to customers in the state or sell over $100,000 (IN, ME, ND, OH, SD, WY) or $500,000 (MA, TN) annually into the state then nexus is established for sales tax purposes.

Your company may be facing new sales tax compliance or reporting requirements in five, and possibly up to 10 states where you are selling products or services, but don’t have a physical presence.  

New State Use Tax Reporting Requirements on the Books Effective July 1, 2017

Four states are introducing new use tax reporting requirements, effective July 1, 2017, for remote vendors in place of passing laws that contradict the physical presence standard.  

These reporting requirements call for out-of-state businesses to either alert their customers of their responsibility to remit use tax or to report directly to the state customer information so that the states can ensure the proper remittance of use tax.  

A brief summary of the states that have enacted new reporting requirements is listed below:

Alabama – Effective July 1, 2017: Legislation was passed that allows the Alabama Department of Revenue to now have the authority to require non-collecting vendors to notify Alabama customers of use tax obligations.

Colorado – Effective July 1, 2017: Non-collecting sellers with annual Colorado sales over $100,000 are required to report to the Colorado Department of Revenue customer information each year. Sellers must also report customers with purchases over $500 each year of their obligation to pay use tax.

Louisiana – Effective July 1, 2017: Out-of-state vendors with sales greater than $50,000 annually must inform Louisiana customers at the time of the transaction that the sale is subject to use tax. Vendors must also provide an annual statement to their customers by January 31st each year indicating the total purchases for the year. An annual report must be sent to the Louisiana Department of Revenue by March 1st in addition to the customer notification.

Oklahoma – Effective February 1, 2017: Out-of-state sellers must notify Oklahoma purchasers of their total purchases for the year by February 1st each year.  

Vermont – Effective July 1, 2017: Vendors with over $100,000 in Vermont sales in the previous calendar year must provide a notice to their Vermont customers with purchases over $500 indicating that use tax may be due. A copy must also be filed with the Vermont Department of Taxes by January 31st each year. Failure to comply could result in a $10 penalty per notice failed to be filed.

Legislation has also been introduced in Hawaii, Nebraska, Pennsylvania, Washington and Wisconsin with similar reporting requirements.

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Shopping trends and taxes

I like to look at trends because they are interesting and many have tax implications.* Trends may indicate a need to update or modernize tax rules or systems. I'm a bit behind on blogging on this, but several weeks ago, there was an article in Fortune - Phil Wahba, "Major Wall Street Firm Expects 25% of U.S. Malls to Close by 2022," 5/31/17. Reasons included bankruptcies and continuing growth in retail e-commerce sales.

I remember when the US Census Bureau first started reporting retail sales for e-commerce in the 1990s and it was less than 1%. They just updated data for 2015 and report that e-commerce retail sales represent 7.2% of total sales for 2015 (it was 6.4% in 2014). That doesn't seem like a lot to me. In contrast, the US Census Bureau reports that for 2015, e-commerce sales of merchant wholesalers represented 30.2% of total sales (it was 28.1% in 2014).

Are retail e-commerce sales going to increase to the point were 25% of US malls will close in the next five years? Seems high to me.  I expect re-purposing where, perhaps, we might do more online shopping while at the mall looking at samples of what we can buy, and getting a latte and recharging our smartphones.  That would use less retail space. Malls might add more ways for people to hang out - activities, fairs, etc.

Tax implications?  A few:

  • More online shopping can mean more uncollected use tax although I suspect a lot of the e-commerce growth will be with Amazon that collects tax in all states (at least on their direct sales).
  • If malls turn into abandoned buildings or vacant lots, property taxes will go down. Is there another need for them?  With an aging population, perhaps the space gets turned into living spaces for older folks - single level, close to public transportation and medical facilities, etc.
What do you think? Will we see 25% of malls close? What will happen to the space?
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Will Asset Protection Trusts Protect Assets From Medicaid Agencies?

There are several types of trusts that are useful asset protection tools.  Asset protection trusts include irrevocable trusts with spendthrift provisions, offshore trusts, and domestic asset protection trusts available in some states (other than Florida).   I have been asked from time to time whether an asset protection trust will protect assets from being considered in an application for Medicaid eligibility.  The question is whether one can remove their assets from Medicaid’s asset ceiling (about $2,000) by transferring their assets to a trust that does protect assets from potential judgment creditors.

Medicaid eligibility will count all assets held in a trust in which the Medicaid applicant has, or could have any beneficial interest. The definition is very broad and encompasses contingent future interests or reversion interest.  If the Medicaid agency can image the applicant getting some benefit, any amount of benefit, under any circumstances all assets in the trust will be considered to belong to the Medicaid applicant. Spendthrift trust provisions that effectively protect the beneficiary’s trust interest from civil creditors do not shield a trust from Medicaid analysis.

There are some trusts that a Medicaid applicant can create to protect his income from being taken to pay for his care in a skilled nursing home while he is receiving Medicaid benefits. These trusts will permit the applicant to fund the trust with any income over Medicaid’s income ceilings and use the trust income for the applicant’s benefit while he is getting Medicaid benefits. Any income or assets in trust at the time of the applicant’s death will be taken by the Medicaid agency to reimburse the state for the cost of care.

The provisions of these Medicaid Trusts (also called “Miller Trusts”) are substantially unlike the provisions of trusts designed for asset protection. Using any type of asset protection trust form to protect assets from Medicaid agencies may deprive the applicant of money used to maintain a comfortable standard of living in a nursing home.

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Make Sure Your Compensation Plans Are in Order and Documented

I recently finished resolving a dispute between a client and the IRS regarding the amount of compensation for the founder and owner of a corporation. While the amount of compensation during one of the years at issues was probably unjustifiably high if viewed by itself, the person's compensation over the years (and including the year in dispute) was readily justifiable when viewed over the entire period that the person worked for the business. We ended up resolving the dispute and the resolution was within $50,000 in compensation from my initial evaluation of the case. But it was an expensive "victory" for the client.

The strongest point for the IRS, and the reason it took as much time and expense to resolve, was the client’s lack of documentation of a consistently applied compensation plan. The client had annual minutes (which many clients do not), but those minutes did not address how the owner’s compensation was determined. The client also did not have a written employment agreement, nor did they have any written (or “understood”) basis for calculating the client’s incentive compensation each year. This lack of a consciously determined pattern to the compensation ended up costing the client several thousand dollars in attorneys fees, and a like amount in additional taxes.

The moral of the story: properly pay and report compensation to employee/owners as such; have a written employment agreement or at least some sort of documentation in your minutes of the oral arrangements for compensation; make sure you have a documented or easily proved method for determining incentive compensation that is reasonable in amount.

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